Vinomofo targets 14 US states
The retailer is targeting a May/June launch for its disruptive business model in the US after spending the second half of 2017 weighing up its next international option, following launches in Singapore and New Zealand in recent years.
Dry will oversee operations from an office in Los Angeles from March, while his business partner Andre Eikmeier looks after Australian operations. Dry told Internet Retailing that the US is a logical next step for the pureplay retailer, given its cultural proximity to Australia and status as the world’s largest, yet remarkably underdeveloped, wine market.
“[The US] is the biggest [wine] market in the world – it’s such an opportunity because developed wine markets consume around 20-30 litres per capita each year, but in America that’s only around nine and it’s already the biggest and growing super fast,” Dry said.
Dry has just returned from a trip to the US where he established the company, applied for liquor licenses and spoke to local suppliers. As part of the initial offer, Vinomofo plans to export a curated range of premium Australian wines, while also bedding down deals with appropriate local suppliers in the coming months.
Events and initial customer engagement programs are being planned as a launchpad for the brand across the pond. Several established players, including Amazon, already sell local and Australian imported wine online in the states, but Dry said tight regulations have driven many potential competitors off, leaving a traditional market dominated by established giants such as Walmart and Costco that’s ripe for disruption.
“It’s a really difficult market, they’ve got all this state-based liquor licensing that’s still heavily influenced by prohibition,” he explained. “But what makes that interesting is that it puts [competitors] off. It’s a hard market to crack, but that excites us because our proposition is super strong and it will work over there.
“To get a long-term future for an Australian wine anywhere, you have to tell that premium story – we’ll be taking the best wines in Australia and taking them to Americans, who have never seen them before.”
It wouldn’t be the first time Dry and Eikmeier have thrown a spanner in the works for established alcohol retailers, following their success against Coles and Woolworths in Australia since launching in 2011.
Dry will also benefit from the experience of launching and expanding the brand in Singapore over the last 18 months, a market which brought in $3.5 million in revenue in its first year. But the unique nature of American liquor regulation has proven to be a challenge that ultimately slashed any hope of launching in lucrative east-coast wine markets such as New York.
“New York is a hard one. You actually need a partnership with a local retailer or your own retail store and there are all these complications around wholesaling,” explained Dry.
Instead, Vinomofo has opted for a licensing strategy based out of California that will enable them to trade in 14 initial markets, enabling Dry to build a profile before tackling more difficult regulation further down the line.
This story was first published on Internet Retailing.